Gov. Chris Christie today killed the multi-billion-dollar Hudson River commuter train tunnel, aborting the nation’s biggest public transit project as well as the state’s decades-long quest to double rail capacity to New York.

Christie said that given the impact of the recession and the probability of continuing cost overruns, the state could no longer afford the tunnel’s escalating costs. More than a half-billion dollars has already been spent on construction, engineering and land acquisition for a project currently budgeted at $8.7 billion that the governor said could go as high as $14 billion.

"The only prudent move is to end this project," he said at a Trenton news conference. "I can’t put taxpayers on a never-ending hook."

With the cancellation, the state will abandon $3 billion in federal funding earmarked for the project. Officials still hope to retain $3 billion in grant money allocated by the Port Authority of New York and New Jersey.

Christie made his decision even as Department of Transportation Secretary Ray LaHood was urging him from behind the scenes not to pull the plug before the two had a chance to discuss the matter, according to officials in the office of U.S. Sen. Robert Menendez (D-N.J.). They said LaHood called Christie before the press conference asking him to hold off.

A federal transportation spokeswoman said the secretary still plans to meet with Christie Friday afternoon "to discuss a path forward" on the tunnel project.

There had been wide speculation for weeks that the Republican governor was planning to cancel the project.

Many Democratic lawmakers believe the governor’s ultimate goal all along has been to redirect New Jersey’s share of the tunnel project into the nearly bankrupt state Transportation Trust Fund, which pays for road and bridge repairs and transit services. That would enable Christie to avoid increasing the gas tax to pay for the fund, generally considered a politically unpopular move.

Christie has said that drivers had to contend with New Jersey Turnpike toll hikes and state residents already have been taxed too much.

But the governor did not discuss at length the trust fund today and said one thing had nothing to do with the other.

Supporters of the tunnel project immediately decried the governor’s decision as short-sighted and politically motivated, in one of the most congested states in the country.

Sen. Frank Lautenberg (D-N.J.) called it one of the biggest public policy blunders in New Jersey’s history.

"Without increased transportation options into Manhattan, New Jersey’s economy will eventually be crippled," Lautenberg said. "The Governor has sentenced New Jersey to a future of insufficient access to New York City, fewer job opportunities, and lower home values."

Also sharply critical was Menendez, who said Christie was "intent on killing the tunnel" no matter what the repercussions.

"The governor’s public statements portray surprise and uncertainty about cost estimates, but it’s hard to understand how he has so little control of and information about a project that is directed by his own administration," said Menendez. "It would seem that a more sensible and level-headed approach on behalf of New Jersey workers, commuters and taxpayers would be to take a deep breath, work with all of the parties involved to identify ways to reign in the costs and get the tunnel built."

But state Sen. Mike Doherty (R-Warren) said Christie was right.

"Our governor understands we cannot spend money we do not have and New Jersey must start living within its means," he said.

As far back the 1950s, New Jersey officials and lawmakers have sought to expand train capacity between New Jersey and midtown Manhattan, now limited to the number of trains that can run through a pair of century-old tunnels built by the old Pennsylvania Railroad in 1910.

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Known as Access to the Region’s Core, or ARC, the new tunnels were to double train capacity to and from New York by the end of 2018, from 23 trains per hour during peak periods to 48 trains per hour.

The plan called for tracks to be built from Secaucus Junction to North Bergen and the western edge of the Palisades, and then on to Manhattan through two new tunnels that were be bored more than 100 feet below ground. The new rail line was to terminating at a station that would be built deep below 34th Street between 6th and 8th Avenues.

There was never any debate over whether the additional rail capacity was needed. However, critics had assailed the project for its costs and what they saw as engineering shortcomings.

Tunnel opponents maintained the project was rushed together so then-Gov. Jon Corzine could get a re-election campaign photo opportunity at a ceremonial ground breaking in summer 2009. They also said the tunnel, which was to end at West 34th Street in Manhattan, lacked connectivity to Penn Station and Manhattan’s prosperous east side.

The tunnel also did not bring trains directly to New York Penn Stations and added no new capacity to Amtrak. In addition, it was not possible to extend the route to Grand Central Terminal, as had once been envisioned.

Proponents said the project would have created 6,000 construction-related jobs annually and close to 45,000 permanent jobs once completed. Project studies claimed it would have provided one-seat rides to Manhattan, gotten 22,000 cars off the roads every day and eliminated nearly 70,000 tons of greenhouse gases every year.

After years of study and successfully lobbying for the billions in federal aid, the project was finally green lighted in 2006. The federal government and Port Authority of New York and New Jersey ultimately each pledged $3 billion. But New Jersey, which had committed $2.7 billion to the tunnel, was responsible for anything over that.

The proposed 9-mile-long tunnel never made it to even ditch status.

The costs began creeping up, turning it into the most expensive public transit project in the country at an estimated cost that increased from $5 billion to $8.7 billion. Then earlier this year, new cost projections by the Federal Transit Administration suggested costs would climb even higher, by at $1.1 billion or more.

In September, Christie — citing the rising costs — called for a 30-day halt on new tunnel construction until the amount of overruns could be determined. He said he didn’t want the New Jersey version of Boston’s "Big Dig" — a tunnel mega-project that saw the final tally climb to nearly ten times the original $2.8 billion estimate.

According to Christie, that review found that the Federal Transit Administration was estimating cost overruns that could climb to nearly $14 billion.

"Simply put, the $8.7 billion estimate was a fiction," said the governor today. "And I’m not going to ask the taxpayers of the state of New Jersey to take it on faith that a project tunneling under Manhattan Island and the Hudson River will run even close to these cost estimates. Our previous experiences with these type of projects and current ones tell us that it will get even worse before it gets better."

He rejected the argument that the state should not leave $3 billion in federal funding on the table.

Gov Chris Christie says tunnel decision was not timed to deflect news away from Schundler testimonyNew Jersey Gov. Chris Christie responds to a question asking if his decision to kill the proposed ARC tunnel project today was an attempt to deflect unflattering developments as former New Jersey education commissioner Bret Schundler testifies before the N.J. Senate this morning about the state's failed Race to the Top application that cost the state $400 million. (Video by Andrew Mills/The Star-Ledger)

Democratic legislators react to Gov. Chris Christie's move to end rail tunnel projectCiting project costs 'far more than New Jersey taxpayers can afford,' Gov. Chris Christie today killed an $8.7 billion Hudson River commuter train tunnel that would expand train capacity between New Jersey and midtown Manhattan. The project was to be the country's largest public works project, with a combined $6 billion provided by the federal government and the Port Authority of New York and New Jersey. But with the state's Transportation Trust Fund nearly bankrupt, Christie said the state could not handle any added costs if the project were to go over budget, as predicted by an executive committee appointed by the governor for the tunnel project. Democratic legislators called the move to cancel the long-planned project partisan politics by a governor with hopes for higher office. (Video by Nyier Abdou and Andrew Mills/The Star-Ledger)

"It’s a crazy argument. The $3 billion in federal funding doesn’t even get us a third of the way under the river. And I’m not going to put the taxpayers of our state on the hook for costs that are in well in excess of what this was originally projected to be."

Christie instead suggested that Lautenberg and Menendez "use their significant influence" to redirect the federal money to a project that "will not potentially bankrupt the taxpayers of New Jersey."

The federal money, though, was tied specifically to the tunnel project.

"The money is not movable to other projects. It is available for a tunnel that will create jobs immediately," complained Lautenberg. "You talk about the shovel being ready. The shovels are already tarnished."

Christie said staff will immediately begin a shutdown of the tunnel project.

Assembly Transportation Chairman John Wisniewski (D-Middlesex) said it was hard to imagine a more irresponsible decision.

"In one massive careless swoop, Gov. Christie has destroyed economic development in the region, crushed job creation in New Jersey and put public safety at risk for decades to come."

The only visible sign of the tunnel today was a support span in the area where the tunnel was to begin in North Bergen, resembling a transportation version of Stonehenge under Tonnelle Avenue in the shadows of Manhattan.